GBP/USD Price Forecast – British pound breaks higher

The British pound initially pulled back during the trading session on Thursday, before rallying above the 50 day EMA. By breaking above that level, and the top of the hammers from the previous two sessions, it looks very likely that the market is going to try to go higher, perhaps reaching towards the 1.2450 level. After that, we have the 1.25 level, which is now being reinforced by the 200 day EMA. With that in mind, it’s likely that if we do get a rally it will probably be sold into given enough time.

GBP/USD Video 04.10.19

The bullish scenario is that we have bounced off of the 61.8% Fibonacci retracement level and could go higher. I do have that marked on the chart, but I think at this point it’s very likely that we need to see some type of catalyst for that bullish pressure to happen. We are starting to see a little bit of acquiescence from the European Union, and that could be the catalyst. That being said, there are still a lot of twists and turns in the Brexit situation so keep in mind that this is going to be very noisy. If we were to break down below the hammer from the Tuesday session, that would open up the door to the 1.20 level underneath which of course is a large, round, psychologically significant figure and the recent low. Expect choppy volatility, but overall you should remember that we are still technically in a downtrend and it should be traded as such.

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